Russia vows to continue expansion of Mir bank card after new US sanctions

A Russian state flag flies over the headquarters of the Central Bank in Moscow, Russia, March 29, 2021. A sign reads: ‘Bank of Russia’. REUTERS/Maxim Shemetov

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LONDON, Sept 16 (Reuters) – Russia’s central bank pledged on Friday to continue increasing the number of countries accepting its Mir bank cards after new U.S. sanctions aimed at people and entities accused of helping Moscow circumvent financial penalties.

The United States on Thursday sanctioned the director general of the Bank of Russia’s National Card Payment System (NSPK), which operates Mir, saying he was seeking to hold the Russian government accountable for its February 24 invasion and the continuation of the war against Ukraine. Read more

“Russia has been quick to find new ways to process payments and conduct transactions,” the US Treasury said. “Directly and indirectly, Russian financial technocrats supported the Kremlin’s unprovoked war” against Ukraine.

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The importance of Mir cards for Russians has increased significantly this year after US payment companies Visa Inc (VN) and Mastercard Inc (MA.N) suspended operations in Russia and their Russian-issued cards ceased operate overseas.

Cuba, South Korea, Turkey, Vietnam and a handful of former Soviet republics accept Mir, which means both “peace” and “world” in Russian, with others like Iran intending to follow soon.

NSPK and Mir themselves are not sanctioned themselves, and US analysts said the US move was aimed at preventing them from being used to evade US sanctions rather than preventing Russian tourists from paying their travel bills. hotel abroad.

The central bank said Mir cards and other NSPK services will continue to operate as usual in Russia.

“Foreign partners make decisions themselves about opening up their infrastructure to accept Mir cards,” the central bank said. “At the same time, we intend to continue the dialogue on expanding the geography of Mir card acceptance.”

The US Treasury says it has blacklisted 22 people, including four financial executives whose actions could support Russia’s war effort by helping it evade financial sanctions imposed on Russia after its invasion of Ukraine .

The four included Vladimir Komlev, the leader of the NSPK.

“Russia created its own state-run card payment system in 2014 for fear of US and European sanctions,” the Treasury said. “In his role, Komlev promoted the Mir network in other countries, which could ultimately help Russia circumvent international sanctions.”

The Treasury said that “non-U.S. financial institutions that enter into new or expanded agreements with NSPK risk supporting Russia’s efforts to evade U.S. sanctions through the extended use of the MIR domestic payment system outside of Russia’s territory.” the Russian Federation”.

Analysts said this implied that existing, limited agreements with NSPK – such as those allowing Russian tourists to pay their hotel bills abroad – were not likely to breach US sanctions.

“They must have some indication, whether diplomatic or intelligence, that Russia is looking to connect its domestic payment system internationally in an effort to evade sanctions,” said Brian O’Toole, a former Treasury official who is a member of the Washington-based agency. Atlantic Council Think Tank.

“I don’t think the administration particularly cares about Russian tourists visiting Turkey and paying their hotel bills,” he added.

NSPK did not immediately respond to a request for comment.

Moscow says what it calls a “special military operation” in Ukraine was needed to prevent its neighbor from being used as a platform for Western aggression and to defend Russian speakers. Kyiv and its Western allies dismiss these arguments as baseless pretexts for an imperial-style war of aggression.

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Reuters reporting; Editing by Kevin Liffey and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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